Raising The Level Of The Game

Georgia’s academic and corporate leaders are joining forces to strengthen business ethics

Jerry Grillo

Ethical Focus: Jim Blanchard, retired Synovus chairman and CEO, and winner of the first Georgia Ethics in Business award

Jennifer Stalcup

You hear it every time another corporate scandal makes headlines, whenever an Enron, an Arthur Andersen or Bernie Madoff rears its misguided, greedy head: “Whatever happened to business ethics?”

And on the heels of that, the jokes, beginning with the oldest of the bunch: “Business ethics? That’s a contradiction in terms, an oxymoron, like jumbo shrimp or political party or corporate responsibility.”

Jim Blanchard never laughs at that one. He doesn’t shoot fish in a barrel, either. Not his style.

“Every time we have a crisis, a scandal or a fraud, you’re talking about a handful of bad actors,” says Blanchard, retired Synovus chairman and CEO, and winner of the first Georgia Ethics in Business Award. “I think most companies operate in an ethical way, and that the true leaders among us are focused on the subject of ethics and honesty and fair dealing and integrity all of the time.”

He accepted the inaugural award, which will be named after him from now on, in September at the Jim Blanchard Leadership Forum, an event he hosts in Columbus every year. About 900 people were in the audience, and all of them seemed to take the honor seriously.

Even so, the idea of “business ethics,” and ethics in general, has often been treated as a joke, in the classroom, the boardroom, especially in government – the Georgia State Ethics Commission, which became a national model, has been significantly hamstrung this year by state lawmakers, who slashed the agency’s budget and neutralized its ability to write rules and carry out its mission of policing campaign and lobbying laws and protecting the public interest.

With such disinterest in government, it should be no surprise that many business schools traditionally offered barely a cursory nod toward notions of a golden rule tucked within the pursuit of profits. For many students, the governing principle always seemed to be: Increase profits, play by the rules, but if you deal from the bottom of the deck, don’t get busted.

“It’s the de facto ethic that so many students are taught – pursue your own self-interest and don’t get caught,” says Dr. Steven Olson, co-founder and director of The Center for Ethics and Corporate Responsibility at Georgia State’s J. Mack Robinson College of Business.

Olson is part of what appears to be a committed movement, because in spite of the cheating and the bottom-line pressures in the real-world corporate environment, there are some leaders in Georgia, in academia and business, who are beating the business ethics drum; and they’re not joking, either.

University ethics centers like those at Georgia State, Emory and Kennesaw State are building character education into business classes, bringing professionals in with their real-world challenges, trying to instill a culture of integrity and social responsibility in future business leaders.

“We have to overcome a lot of stereotypes,” Olson says. “The biggest one is, if you didn’t learn right from wrong as a kid, it’s too late to learn it when you’re in business school. The evidence is absolutely to the counter. People make the largest gains in their ability to reason through ethical and social issues as an adult, at the graduate or professional level.”

Olson sees the potential goody-two-shoes in everyone – that’s sort of been his job.

He earned his masters in religion from Yale and PhD from Emory, where he was an instructor and director of business and professional ethics at Emory’s Center for Ethics.

He teaches Georgia State’s MBA students, and now offers two ethics-based courses as part of the Robinson School’s executive doctorate program. He’s also a sought-after consultant who’s taught leadership and ethics and environmental sustainability to thousands of executives from a long client list that includes some of Fortune magazine’s “100 Best Companies to Work For.”

Olson is just the guy I needed to meet in my search for convincing ethicists. Cynics of the “business ethics” concept are easy to find – I read the news, I’m an American consumer, I’ve read Milton Friedman, I look in the mirror. The mission was to find Georgia people who are, to borrow an Olsonism, bathed in this ethics stuff.

So I went to Columbus, where the concept of “servant leadership” has become something like a banner for the community. Columbus State University (CSU), which hosted the Leadership Forum, has even added a master’s program in servant leadership.

“The discussion of business ethics comes in cycles,” says CSU President Tim Mescon. “And it spikes in times of crisis – business crisis, economic crisis or a real failure in character.

“Now, hopefully, the discussion and dialogue around ethics will become much more embedded in educational culture moving forward.”

Good Apples

Phil Jacobs credits his Atlanta Rotary Club pal Margaret DeFrancisco, CEO of the Georgia Lottery, for jump-starting the Georgia Ethics in Business Award and Scholarship (a one-year post-graduate scholarship of $25,000 goes to a scholar studying in Georgia).

“We got into this discussion about how unbelievably important it is that the lottery maintain an unblemished record,” says Jacobs, retired chief of BellSouth’s Georgia operations, now senior consultant with Coxe Curry & Associates. “The minute someone finds something fishy going on it could be catastrophic for the state.”

They were sick and tired of reading about ponzi scandals and crooked executives. It was giving everyone in business a black eye.

“The whole business community has been demonized,” Blanchard complains, just a few minutes before receiving his award.

It’s understandable, Jacobs says. “With the economic struggles we’ve had, the high unemployment and all the news about dishonesty in business, it’s easy to see why people would have such a negative impression.”

DeFranisco, Jacobs and their fellow planners reasoned that the majority of people in business are good, solid folk. DeFrancisco committed the Georgia Lottery Corporation’s involvement as lead sponsor. The Georgia Chamber of Commerce and Georgia Trend magazine signed on as co-sponsors. They brought in other partners to create the award program, including a couple of well-known ethicists, Betty Siegel and Paul Voss.

Kennesaw State University President Emeritus Siegel, who holds the Distinguished Chair of Leadership, Ethics & Character at KSU, has been writing, teaching and observing this stuff for years. She thinks the timing couldn’t be better for statewide business ethics recognition.

“Cynicism is an all-time high and trust is an all-time low,” she says. “And trust is a basic element of ethical behavior.”

Voss is a literature professor at Georgia State, where he’s taught courses on business ethics. He’s also president of Ethikos, a business ethics consulting firm.

“I might not be the smartest guy in the room, but I know a lot of smart people – Aristotle, Shakespeare, Dante, Machiavelli,” Voss says. “People have been struggling with these issues for more than 2,500 years. I try to bring the treasury of the world’s knowledge into the board room.”

Yeah, but Machiavelli? Was Vlad the Impaler busy?

Voss, whose next book is entitled Loved or Feared: Paradigm Shifts and the Rejection of Machiavelli, quickly explains that he uses the 16th century Italian philosopher and inventor of modern political science, “as the example of exactly what not to do, the culture that can’t sustain itself.”

Though philosophical principles may conflict, and probably don’t always apply to the ethical quandaries lurking on the business mean streets, Voss has had success with his humanities approach. His Ethikos client list includes General Electric, Home Depot, American Express, Georgia Tech, the University of Georgia and the FBI.

So the award originators came up with a list and Blanchard’s name kept rising to the top, “to no one’s surprise,” DeFrancisco says.

Although Olson wasn’t directly involved in the new Georgia Ethics in Business Award, his firm, Generative Consulting, actually designed and developed the Synovus Leadership Institute for Blanchard.

The ethics and corporate responsibility center Olson directs at Georgia State has been bestowing its annual Ethics Advocate Award since 2003. This year’s winner is Helene Gayle, president and CEO of CARE.

“Someone asked him what his environmental vision is, and he didn’t have an answer, other than his company’s compliance with the law,” Olson says, beginning the now-famous story of Anderson, who was CEO of carpet-manufacturer Interface, Inc., in 1994 when he read The Ecology of Commerce by Paul Hawken and had his conversion experience.

“Ray tried to understand the nature of the harm his company was doing to the environment, and it changed him profoundly,” Olson says. “It was an emotional experience for him, because he thought about the world he’d be leaving to his grandchildren.”

Anderson’s experience really does exemplify the proactive approach to an ethical dilemma on a corporate-wide scale.

He set a course of sustainability for Interface with the goal of eliminating the company’s environmental footprint by 2020 – doing no harm to the biosphere and taking nothing from the earth that can’t be recycled or regenerated. So far the company has cut its greenhouse gases by more than 80 percent and – at least, before the construction and housing downturn – sales were climbing.

“One thing I came to the conclusion of when I was trying to teach this stuff many years ago at Emory, is the real barrier to some of these difficult ethical decisions is an emotional one,” Olson says. “Freud was right. When something is emotionally difficult, we are selectively inattentive and tend to suppress that stuff.”

Anderson went into his grief over whatever world he imagined he’d leave his grandchildren if he’d maintained the legal status quo, held onto that grim vision and took measures to change the outcome, measures that have enhanced his company’s reputation and bottom line.

Beyond Rules

One prevailing school of thought defines being ethical as playing by the rules. Archie Carroll doesn’t teach at that school.

“Business has four essential social responsibilities,” says Carroll, director of the Nonprofit Management & Community Service Program, and Robert W. Scherer Professor Emeritus at UGA’s Terry College of Business, where he’s been teaching business ethics for 40 years.

“Economics is first. Business has a responsibility to be profitable. Second, business has a legal responsibility – obey the laws of the land. Third, business has an ethical responsibility. Some people think that means simply following the law, but the law doesn’t cover all the ethical issues one can face.”

He uses cell phones as an example.

“It’s still legal to use cell phones while driving, but it causes more accidents than drunk driving. Yet, so many companies put pressure on managers being available 24/7 and get the job done instantaneously. That’s one example where the law is lagging ethics.”

The fourth responsibility that society has conferred upon business, Carroll says, is philanthropy, or giving back to the community.

Blanchard touched on this during his acceptance speech in Columbus.

A little while before the award was announced, during a break in the Leadership Forum, I spotted Blanchard near the stage talking with his old friend, Dan Amos, the CEO of Aflac. Here they were together, two of the acknowledged leaders in business ethics.

Amos, who avoids the spotlight like it was an acid bath, quietly excused himself and I thought, “That guy was named one of the most influential people in the world in business ethics, maybe I should be talking to him, too.” But he’d disappeared into the crowd.

Aflac seems to have a permanent place on those annual lists of most ethical companies and best places to work. Matter of fact, Aflac and UPS are the only Georgia-based companies on the list of World’s Most Ethical Companies for 2009, as identified by the Ethisphere Institute, the same group that recognized Amos.

By the way, Ethisphere’s list of most ethical companies doesn’t include any American banking companies. But I was here to meet the exception, the banker who had won the award for ethics in Georgia, the guy on everyone’s list, the epitome of the Columbus servant-leadership culture.

“The perception is that everybody’s a crook, but the truth is, a very small number of people in business are misbehaving,” Blanchard says.

But the idea of servant leadership, the notion of ethical behavior, goes beyond simply following the rules. That fourth part of Carroll’s four essentials is high on Blanchard’s priority list.

“Giving back is critical,” he says. “Giving of self to others is so essential to the health and well being of our economy and our nation.”

And according to the ethicists, it’s good business.

“Good ethics is a sound business strategy,” says Professor Voss. “Corporations can no longer ignore the issue of ethical decision making. To do so is punishment in the marketplace.

“I’m not talking about moral decisions, but business decisions, and how we ought to conduct business and how we ought to brand ourselves. Business is a fundamentally human activity. If we only look at the bottom line, we lose sight of that ethical dimension of this very human activity.”

Blanchard built a powerful banking engine – which has sputtered in the downturn. But he likes to say that honesty and virtue have their rewards. It works for him and it worked for Synovus.

The late Dan Seligman, longtime business writer and editor, once wrote in Forbes magazine, “The evidence is not even clear that honesty pays.” And Olson says he does not want to mislead.

“I think we do people a disservice if we tell them that doing right is always going to be better for you financially. That’s not the case,” Olson says. “You actually have to work really hard and you won’t always turn the right thing into the more profitable thing.

“Being ethical means you have to be twice as good a businessperson at the next guy or gal. You have to raise your level of game.”